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CHOP will borrow $750 million for $2.59 billion patient tower, $480 million research center

The new patient tower at CHOP will have 200 private rooms with the capacity to add 300 more when it opens in 2028.

Children's Hospital of Philadelphia has started construction on a 26-story, $2.59 billion patient tower on its campus in University City. The new tower, show in an architectural rendering from a bond offering statement, is scheduled to open in 2028.
Children's Hospital of Philadelphia has started construction on a 26-story, $2.59 billion patient tower on its campus in University City. The new tower, show in an architectural rendering from a bond offering statement, is scheduled to open in 2028.Read moreCHOP bond offering statement

Children’s Hospital of Philadelphia plans to borrow $750 million to help pay for a long-planned $2.59 billion patient tower and a $480 million research facility under construction on the nonprofit’s Schuylkill Avenue campus, according to bond offering statements issued last week.

The new patient tower will have 200 private patient rooms and 12 operating rooms when it opens in 2028. In planning at least since 2020, the building will have the capacity to add an additional 300 beds and another 15 operating rooms, the bond statement said.

CHOP is spending $1 billion more than the University of Pennsylvania Health System did on its new patient pavilion, which opened in the fall of 2021 and was planned before the COVID-19 inflationary wave. CHOP’s tower is going up next to its current hospital complex, which had 623 licensed beds on June 30. CHOP was using 616 of them.

During an interview in early 2020, a CHOP official said the health system would pay for the new tower without borrowing money, instead relying on financial reserves, profits, and philanthropy. But four years ago, the tower had what the official called a “conceptual” price tag of $1.9 billion.

Since then overall higher operating costs have likely increased the building’s cost and definitely squeezed CHOP’s profitability. From fiscal 2022 through fiscal 2024, CHOP’s operating profit margin averaged 2.2%. In the three years before the pandemic, the average was 7.4%.

CHOP’s new research tower, the Morgan Center for Research & Innovation, is under construction on the east side of the Schuylkill. Real estate investor Mitchell L. Morgan and his family donated $50 million toward its construction cost. The 350,000-square-foot Morgan Center will have 17 stories and contain 120 research bays. The building stands near the South Street bridge and next to the 720,000-square-foot Roberts Center for Pediatric Research, which opened in 2017.